Wednesday, 27 July 2011

Amazon Kindle - Winning the Content War?

We received an email this week from our Apple content distributor. Here it is:

As the demand to get content distributed and sold on Apple's iBookstore continues to grow, [distributor] is striving to meet our publisher partners' needs in the most efficient manner possible. In order to help plan and meet expectations, we'd like to ask your assistance. Please e-mail the number of titles that your company plans to distribute to Apple for the remainder of the 2011 calendar year to [someone's email address].

Is this true? Unlikely. It is more likely that Apple are pushing their distributors for sales forecasts, to test the impact on the market of their decision to prevent app developers from selling content direct to the actual person who owns the iPad outright and should be able to do whatever the hell they want with it.

Here is our reply:

In response to the email I received asking for [distributor] projections, I would like to say that I will be publishing 8 books between now and the end of the year, however I am supporting the Amazon Kindle platform as a priority because of the unexpected and unnecessary cost and complexity of supporting iBooks.

Specifically, I went to great lengths to ensure that my first iBook was fully compliant with the epub standard, only to find that Apple themselves don't comply with it, so I had to pay for [distributor] to make the conversion, and your technical people couldn't actually tell me what was wrong with the original, so I have no chance of correcting these errors myself, of which I am capable given the right information. So Apple have enforced a standard that they don't comply with, and they guard the information that is required for me to fix the problem, and I am not prepared to pay to have you convert every book for me when the conversion process for Kindle is quick, easy and reliable.

Please do pass this on, because I'm sure I'm not the only publisher with this problem. 

Cast your mind back a few years... What killed off Betamax in favour of the technically inferior VHS? Content. The studios licensed their content to the consortium of VHS developers, not Sony's Betamax. People couldn't get films, so they didn't buy the machines. Sony learned quickly, and bought Columbia Pictures so that they would never be denied content again.

Random House recently announced that they are putting their entire catalogue of 17,000 books onto the iPad. But for any publishers who don't deal direct with Apple, the Kindle is a much easier and more reliable option. Will this fragment the market? Or will it polarise the market into serious readers who will see the Kindle as a clear winner, or people who primarily want to play games and waste time on Facebook, and dip into the odd ebook here and there, who will go for tablet PCs. Note: Tablet PCs, not necessarily the iPad.

About 20 years ago, the mobile phone companies realised that whoever owned the device in your hand owned what you saw and heard. But wireless Internet is moving the goalposts again. That device could be any one of a number of things, from your phone to your tablet PC, even your television. This favours the content distributors.

Apple have played a very risky strategy; giving content and app development over to third parties, and then trying to control them with restrictive, unfavourable contract terms, based on the belief that Apple owns the world, therefore the developers have no choice but to comply. You want to sell your products? You have to play by Apple's rules, because they control the market.

Except, they don't.

They have scored some early wins by getting customers to fall in love with their products, but this will absolutely not last forever. How do we know?

When Ford's iconic XR3i ruled the suburban backstreets, every product had an 'i' on the end of its name.

When Sony's Walkman ruled the subways and classrooms, every product had 'man' on the end of its name.

When McDonalds ruled the world of crap jobs, every crap job became a McJob.

When Yahoo became My Yahoo, every website became 'My' website.

When the Internet came into the home, every tenuously related product had an "e" at the beginning of its name.

When Apple's iPod took the Walkman's crown, every product had an 'i' at the beginning of its name.

Apple is tightening its grip on the market. And what can you expect to happen next? The tighter Apple squeezes, the more of that market will slip through its fingers.

Changing My Mind About the Amazon Kindle

A while ago, I said that the Kindle is a pointless device given the price difference between something that only displays ebooks and a tablet computer that can do pretty much anything that any other computer can do.

However, I am beginning to change my mind.

Earlier this week, Apple announced that it is going to start enforcing its rules that mean that content must be acquired through iTunes, where Apple can of course make money. It would be like being forced to only by a BMW through a BMW dealer. OK, you might be able to live with that to get a BMW. But then you are also forced to buy your petrol (gas), car washes, bags of sweets and pine tree shaped air fresheners through the BMW garage too. You might feel that BMW were taking advantage of your allegiance to their brand.

Personally, I feel that Apple's philosophy is, "You bought an Apple. You love Apple. Apple is your life. You don't need anything else. We own you." They're like a paranoid, clingy, dependent lover that just happens to be holding a gun to your head.

Here's a snippet of the story from The Bookseller:

Apple is finally getting round to enforcing its new app purchasing guidelines after reports emerged over the weekend of direct purchasing links being removed from some third-party apps

E-book companies now have the option of selling direct through Apple's iTunes store at a cost of 30% per transaction, or hoping customers buy direct from their own stores and use the app only for reading the purchased material.

The simple fact it that no third-party aggregator can afford to pay a 30% fee for being the middle-man on a platform it does not own itself, meaning that in the short term the e-book market is going to be a less interesting environment for book readers and a less useful place for those interested in developing e-book apps.

To explain this simply, here's what has happened.

You go to the iTunes store, looking for ebooks. To read an ebook, you have to BUY an ebook app such as iBooks. Of course, the majority are free because the developer wants to make their money on ebook sales, not on the app itself. So you download the app.

You BUY some books for the app from iTunes, on which Apple makes a profit.

Inside the app is a link to find more books, which you can buy direct from the developer's website, which saves all the hassle of having to buy through iTunes, which normally involves the download failing half way through, you not getting a refund and not being able to re-download, so you have to buy another copy and then chase Apple for a refund.

So you buy the book on the developer's site and read it on your iPad.

Not any more. Apple are now forcing you to buy all content through iTunes and preventing you from buying content elsewhere.

Hang on.... We just paid £600 for the thing, and you're going to dictate where I can and can't get the stuff that I use it for?

Sorry, Apple, I just don't feel the same way about you any more... Now, put the gun down.